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Corporation Tax Bill


Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 1 — Income and Corporation Taxes Act 1988

618

 

“76ZD   

Retraining courses

(1)   

This section applies if—

(a)   

a company carrying on life assurance business (“the

employer”) incurs training course expenses,

(b)   

they are incurred in relation to a person (“the employee”)

5

who holds or has held an office or employment under the

employer, and

(c)   

the relevant conditions are met.

(2)   

The expenses are brought into account under section 76 as expenses

payable (so far as they otherwise would not be).

10

(3)   

In this section—

“retraining course expenses” means expenses incurred in the

payment or reimbursement of retraining course expenses

within the meaning given by section 311(2) of ITEPA 2003,

and

15

“the relevant conditions” means—

(a)   

the conditions in subsections (3) and (4) of section 311

of ITEPA 2003 (employment income exemptions:

retraining courses), and

(b)   

in the case of travel expenses, the conditions in

20

subsection (5) of that section.”

35         

After section 76ZD insert—

“76ZE   

Retraining courses: recovery of tax

(1)   

This section applies if—

(a)   

an employer’s liability to corporation tax for an accounting

25

period is determined on the assumption that it is entitled by

virtue of section 76ZD to bring an amount into account in

determining the amount of a deduction to be made under

section 76, and

(b)   

without section 76ZD the employer would not have been so

30

entitled.

(2)   

If, subsequently—

(a)   

the condition in section 311(4)(a) of ITEPA 2003 is not met

because of the employee’s failure to begin the course within

the period of one year after ceasing to be employed, or

35

(b)   

the condition in section 311(4)(b) of ITEPA 2003 is not met

because of the employee’s continued employment or re-

employment,

   

an assessment of an amount or further amount of corporation tax

due as a result of the condition not being met may be made under

40

paragraph 41 of Schedule 18 to FA 1998.

(3)   

Such an assessment must be made before the end of the period of 6

years immediately following the end of the accounting period in

which the failure to meet the condition occurred.

(4)   

If subsection (2) applies, the employer must give an officer of

45

Revenue and Customs a notice containing particulars of—

(a)   

the employee’s failure to begin the course,

 
 

Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 1 — Income and Corporation Taxes Act 1988

619

 

(b)   

the employee’s continued employment, or

(c)   

the employee’s re-employment,

   

within 60 days of coming to know of it.

(5)   

If an officer of Revenue and Customs has reason to believe that the

employer has failed to give such a notice, the officer may by notice

5

require the employer to provide such information as the officer may

reasonably require for the purposes of this section about—

(a)   

the failure to begin the course,

(b)   

the continued employment, or

(c)   

the re-employment.

10

(6)   

A notice under subsection (5) may specify a time (not less than 60

days) within which the required information must be provided.”

36         

After section 76ZE insert—

“Redundancy payments etc

79ZF    

 Redundancy payments and approved contractual payments

15

(1)   

Sections 76ZG to 76ZI apply if—

(a)   

a company to which section 76 applies (“the employer”)

makes a redundancy payment or an approved contractual

payment to another person (“the employee”), and

(b)   

the payment is in respect of the employee’s employment

20

wholly in the employer’s life assurance business or partly in

the employer’s life assurance business and partly in one or

more other capacities.

(2)   

For the purposes of this section and sections 76ZG to 76ZH

“redundancy payment” means a redundancy payment payable

25

under—

(a)   

Part 11 of the Employment Rights Act 1996, or

(b)   

Part 12 of the Employment Rights (Northern Ireland) Order

1996.

(3)   

For the purposes of this section and those sections—

30

“contractual payment” means a payment which, under an

agreement, an employer is liable to make to an employee on

the termination of the employee’s contract of employment,

and

a contractual payment is “approved” if, in respect of that

35

agreement, an order is in force under—

(a)   

section 157 of the Employment Rights Act 1996, or

(b)   

Article 192 of the Employment Rights (Northern

Ireland) Order 1996.”

37         

After section 76ZF insert—

40

“76ZG   

Payments in respect of employment wholly in employer’s business

(1)   

This section applies if the payment is in respect of the employee’s

employment wholly in the employer’s life assurance business.

 
 

Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 1 — Income and Corporation Taxes Act 1988

620

 

(2)   

The payment is treated as expenses payable which fall to be brought

into account at Step 1 in section 76(7), so far as it otherwise would not

be.

(3)   

The amount brought into account by virtue of this section for an

approved contractual payment must not exceed the amount which

5

would have been due to the employee if a redundancy payment had

been payable.

(4)   

If the payment is referable to an accounting period beginning after

the business has permanently ceased to be carried on, it is treated as

referable to the last accounting period in which the business was

10

carried on.”

38         

After section 76ZG insert—

“76ZH   

Payments in respect of employment in more than one capacity

(1)   

This section applies if the payment is in respect of the employee’s

employment with the employer—

15

(a)   

partly in the employer’s life assurance business, and

(b)   

partly in one or more other capacities.

(2)   

The amount of the redundancy payment, or the amount which

would have been due if a redundancy payment had been payable, is

to be apportioned on a just and reasonable basis between—

20

(a)   

the employment in the life assurance business, and

(b)   

the employment in the other capacities.

(3)   

The part of the payment apportioned to the employment in the life

assurance business is treated as a payment in respect of the

employee’s employment wholly in the life assurance business for the

25

purposes of section 76ZG.”

39         

After section 76ZH insert—

“76ZI   

Additional payments

(1)   

This section applies if the employer’s business, or part of it, ceases

(permanently) to be carried on and the employer makes a payment

30

to the employee in addition to—

(a)   

the redundancy payment, or

(b)   

if an approved contractual payment is made, the amount that

would have been due if a redundancy payment had been

payable.

35

(2)   

If—

(a)   

the additional payment would not otherwise be regarded as

expenses payable for the purposes of section 76, but

(b)   

that is only because the business, or the part of the business,

has ceased to be carried on,

40

   

the additional payment is regarded as expenses payable for the

purposes of section 76.

(3)   

So far as the additional payment would, apart from this subsection,

be regarded as expenses payable for the purposes of Step 5 in

subsection (7) of section 76, it is not to be so regarded for the

45

 
 

Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 1 — Income and Corporation Taxes Act 1988

621

 

purposes of that subsection (or of subsection (2) above so far as

relating to section 76).

(4)   

The amount treated under this section as expenses payable for the

purposes of section 76 is limited to 3 times the amount of—

(a)   

the redundancy payment, or

5

(b)   

if an approved contractual payment is made, the amount that

would have been due if a redundancy payment had been

payable.

(5)   

If the payment is referable to an accounting period beginning after

the business or the part of the business has ceased to be carried on, it

10

is treated as referable to the last accounting period in which the

business, or the part concerned, was carried on.”

40         

After section 76ZI insert—

“76ZJ   

Payments by the Government

(1)   

This section applies if—

15

(a)   

a redundancy payment or an approved contractual payment

is payable by a company to which section 76 applies (“the

employer”), and

(b)   

a payment to which subsection (2) applies is made in respect

of the payment.

20

(2)   

This subsection applies to—

(a)   

payments made by the Secretary of State under section 167 of

the Employment Rights Act 1996, and

(b)   

payments made by the Department for Employment and

Learning under Article 202 of the Employment Rights

25

(Northern Ireland) Order 1996.

(3)   

So far as the employer reimburses the Secretary of State or

Department for the payment, sections 76ZG to 76ZI apply as if the

payment were—

(a)   

a redundancy payment, or

30

(b)   

an approved contractual payment,

   

made by the employer.”

41         

After section 76ZJ insert—

“Contributions to local enterprise organisations or urban regeneration companies

76ZK    

 Contributions to local enterprise organisations or urban regeneration

35

companies

(1)   

This section applies if a company to which section 76 applies (“the

contributor”) incurs expenses in making a contribution (whether in

cash or in kind)—

(a)   

to a local enterprise organisation, or

40

(b)   

to an urban regeneration company.

(2)   

The expenses are treated for the purposes of section 76 as expenses

payable which fall to be brought into account at Step 1 in section

76(7).

 
 

Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 1 — Income and Corporation Taxes Act 1988

622

 

(3)   

But if, in connection with the making of the contribution, the

contributor or a connected person—

(a)   

receives a disqualifying benefit of any kind, or

(b)   

is entitled to receive such a benefit,

   

the amount treated in accordance with subsection (2) is restricted to

5

the amount of the expenses less the value of the benefit.

(4)   

For this purpose it does not matter whether a person receives, or is

entitled to receive, the benefit—

(a)   

from the local enterprise organisation or urban regeneration

company concerned, or

10

(b)   

from anyone else.

(5)   

Subsection (6) applies if—

(a)   

an amount has been brought into account in accordance with

subsection (2), and

(b)   

the contributor or a connected person receives a

15

disqualifying benefit that is in any way attributable to the

contribution.

(6)   

The contributor is to be treated as receiving, when the benefit is

received, an amount—

(a)   

which is equal to the value of the benefit (so far as not

20

brought into account in determining the amount of the

deduction), and

(b)   

to which the charge to corporation tax on income applies.

(7)   

In this section—

“disqualifying benefit” means a benefit the expenses of

25

obtaining which, if incurred by the contributor directly in a

transaction at arm’s length, would not be expenses payable

for the purposes of section 76,

“local enterprise organisation” has the meaning given by

section 83 of CTA 2009,

30

“urban regeneration company” has the meaning given by

section 86 of CTA 2009.

(8)   

Section 839 (“connected person”) applies for the purposes of

subsections (3) and (5).”

42         

After section 76ZK insert—

35

“Unpaid remuneration

76ZL    

 Unpaid remuneration

(1)   

This section applies if—

(a)   

an amount is charged in respect of employees’ remuneration

in the accounts for a period of a company to which section 76

40

applies,

(b)   

the amount would apart from this section be brought into

account under section 76 as expenses payable, and

(c)   

the remuneration is not paid before the end of the period of 9

months immediately following the end of the period of

45

account.

 
 

Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 1 — Income and Corporation Taxes Act 1988

623

 

(2)   

If the remuneration is paid after the end of that period of 9 months,

the amount is brought into account for the period of account in

which it is paid.

(3)   

But—

(a)   

subsection (2) is subject to section 86 of FA 1989 (spreading of

5

relief for acquisition expenses), and

(b)   

in interpreting that section the remuneration is treated as

expenses payable which fall to be included at Step 1 in section

76(7) for the period of account in which the remuneration is

paid.

10

(4)   

The amount is not brought into account under section 76 as expenses

payable if it is not paid.”

43         

After section 76ZL insert—

“76ZM   

 Unpaid remuneration: supplementary

(1)   

For the purposes of section 76ZL an amount charged in the accounts

15

in respect of employees’ remuneration includes an amount for which

provision is made in the accounts with a view to its becoming

employees’ remuneration.

(2)   

For the purposes of section 76ZL it does not matter whether an

amount is charged for—

20

(a)   

particular employments, or

(b)   

employments generally.

(3)   

If the profits of the company are calculated before the end of the 9

month period mentioned in section 76ZL(1)(c)—

(a)   

it must be assumed, in making the calculation, that any

25

remuneration which is unpaid when the calculation is made

will not be paid before the end of that period, but

(b)   

if the remuneration is subsequently paid before the end of

that period, nothing in this subsection prevents the

calculation being revised and any tax return being amended

30

accordingly.

(4)   

For the purposes of this section and section 76ZL remuneration is

paid when it—

(a)   

is treated as received by an employee for the purposes of

ITEPA 2003 by section 18 or 19 of that Act (receipt of money

35

and non-money earnings), or

(b)   

would be so treated if it were not exempt income.

(5)   

In this section and section 76ZL—

“employee” includes an office-holder and “employment”

therefore includes an office, and

40

“remuneration” means an amount which is or is treated as

earnings for the purposes of Parts 2 to 7 of ITEPA 2003.”

44         

After section 76ZM insert—

 
 

 
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